According to section 25 of the Norwegian Marketing Control Act, actions in business that breach good business practices are prohibited. Whether a competitor is acting in breach of good business practices must be determined by carrying out an overall assessment, taking both objective and subjective factors into account. Section 25 of the Norwegian Marketing Control Act aims to govern a healthy business environment and enforce loyal business practices. According to case law, there is a threshold for what actions can be viewed as a breach of good business practice, and the rule should not be interpreted so strictly that it inhibits competition in the market.
Former employees establishing a competing business is not in itself a breach of section 25 of the Norwegian Marketing Control Act. The Court of Appeal stated that, as a starting point, employees are allowed to prepare their transition to a start-up company by, for example, establishing a new company and domain, as long as these actions are not visible in the market or by the former employer's customers, suppliers, and contracting partners. However, the Court of Appeal pointed out that the new company must be able to reach its position in the market based on the former employees' own ability to contribute effectively to the market. Former employees shall not establish a competing business by unlawfully exploiting their former employer's business. In such cases, the new competing business could breach good business practices and therefore be prohibited cf. section 25 of the Norwegian Marketing Control Act.
The Court of Appeal stated, as a general point, that an employee's subjective knowledge falls outside of the scope of protection of trade secrets. This includes the employee's right to use general knowledge and competence concerning technical insight and professional experience obtained during employment. It is the unlawful use of trade secrets that is prohibited. A central point in the case was that the former employees were employed under employment agreements containing confidentiality clauses. The confidentiality clauses stated that confidential information included "any information of confidential or a secret nature concerning the business of the Company". Therefore, the central question before the Court of Appeal was whether the information forwarded to the former employee's private email address contained "information of confidential or secret nature concerning the company's business".
The Court of Appeal found that the information forwarded to the former employees' private email addresses breached the confidentiality clause in the employment agreement. The documentation contained information that would have commercial value to a competing business. In addition, some of the information constituted trade secrets according to the Norwegian Trade Secret Act.